S&P500 was up 3.5 points, closed at 1055.33. Stocks finished higher Wednesday after spending most of the day in the red, following another round of disappointing housing news. I think today's market action is a sign that they had priced in the bad news, and this has allowed the rest of the market to come back. Stocks are extraordinarily cheap and oversold at this point, but the question is, are they sufficiently cheap to discount the economic weakness?
Yesterday I posted, "it's a good opportunity for day trading. Buy any panic sell off and short any extreme complacency. Watch support 1041, 1019". Today market gapped down and have an early sell off down to our 1041 support, actual low 1039.83. I bought UPRO at 117 and sold it at 119.5 when SPX hit 1050. I should wait for 1060 resistance to sell my stock, but I was unable to stay in front of my computer, so I just sold it at the first resistance 1050.
Technical analysis again prove to be the best short term bullet prove trading tool. Even though we have a very bad housing data today, market still can recover from 1040 support. I think market is searching a short term bottom, I want to see it retest the 1020-1010 area and rebound. Actually, 1040 seems to be a reasonable low, but you know, I always looking for the perfect point to enter.
Market probably will fill the gap at 1065-1070 area, therefore, the next resistance watch 1065-1070, then 1080, 1100.
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